New Year’s First Setback

Posted by State Rep. Mike Sanders40sc on January 07, 2013

By State Rep. Mike Sanders

I would like to wish everyone a Happy New Year. As a nation we’ve been through both dismal and prosperous economic times. Even as the actions of Congress and President Barack Obama disappoint, a new year gives us hope. Although our country’s leaders have failed to cut spending and will be increasing our taxes, we can take some heart in the fact that our state congressional delegation and numerous individuals across the nation continue to fight to protect us from a burdensome, overbearing government and future economic ruin.

The moment that made me the angriest was when I watching the president respond to the House passage of the deal. I think it was highly disingenuous to say that middle income earners would not receive a tax increase. The deal did nothing to prevent a temporary reduction in the Social Security payroll tax from expiring. According to the Tax Policy Center, 77 percent of American households will face higher federal taxes in 2013. Households making between $40,000 and $50,000 will face an average tax increase of $579. Households making between $50,000 and $75,000 will face an average tax increase of $822.

Social Security is financed by a 12.4 percent tax on wages up to $113,700. The share paid by workers was reduced from 6.2 percent to 4.2 percent in 2011 and 2012, saving a typical family about $1,000 a year.

The Congressional Budget Office estimates an additional $4 trillion of debt by 2022, after the implementation of this deal. That assumes spending cuts are implemented by the new March deadline.

As infuriating as these tax increases are, the blow would have been softened if the deal had done anything to address spending cuts. As part of past deals, automatic spending cuts were set to go into effect because targeted cuts could not be agreed upon. Now, as part of this deal, those spending cuts are off the table. Basically, our leaders have made quite a spectacle of attempting to enact spending cuts without actually getting anything accomplished.

In my opinion, the U.S. government does not have a revenue problem, it has a spending problem. We continue to pass stimulus and spending packages, even when it is unwise, and always fail to enact spending reforms. We are on a road well-traveled by European nations. If we continue on this path, we face the same fate as countries like Greece. I continue to have faith though that in time, enough people will recognize this danger and help steer our country back to the ideals of limited government.

As always, I would love to hear from you. I can be reached at the Capitol office at (405) 557-7407.